Our Stock of the Week is Nebius Group NV (NBIS). NBIS is a Netherlands-based technology company that builds infrastructure for the global AI industry. Its core business is an AI-centric cloud platform that provides large-scale GPU clusters, cloud platforms, and tools tailored for AI and machine learning workloads. The company designs proprietary hardware, including servers and data centers, and offers managed services that support AI model development, training, and deployment.
NBIS has a strong partnership with NVIDIA (NVDA) and uses its advanced GPUs like H100, H200, and Blackwell platforms. It also emphasizes energy-efficient, EU-compliant infrastructure.
The company has a strong focus on Europe and plans to invest over $1 billion in 2025 to expand its European AI infrastructure and a new GPU cluster in Paris. It is tripling its capacity in Finland to 60,000 NVIDIA GPUs. The EU-US trade deal should be a tailwind to the company.
NBIS also has several subsidiaries with a total value of $3.7 billion to $5.7 billion. These include Clickhouse, which is a database management system, Toloka, which is backed by Jeff Bezos and provides training for generative AI, and Avride, which develops autonomous driving technology.
If these subsidiaries are stripped out, the NBIS core AI business is valued at $7-9 billion and is expected to generate $750 million to $1 billion in 2025 and grow at triple digits. This gives it a much more attractive valuation versus CoreWeave (CRWV).
NBIS is not currently profitable but grew revenue 385% last quarter and projects EBIT margins of 20-30% as it scales its operations. The company may need to make significantly more capital investments, but it is at the heart of growth in the AI industry.
On July 13, Goldman Sachs placed a buy rating on the stock with a target price of $68. The analyst stated that Nebius is a leading player in the artificial intelligence neo-cloud market and is well-positioned given its full stack software offering, cost advantages, and expertise at scale. Goldman sees a positive risk/reward at current share levels.
Technically, the stock is currently in a trading range and is awaiting earnings on the morning of July 31.
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